Santanu Agarwal’s Vision: Bridging Financial Inclusion through Innovative Solutions

In the dynamic landscape of India’s financial sector, Santanu Agarwal emerges as a visionary leader, steering the transformation of Paisalo Digital towards pioneering solutions for the country’s unbanked population. Agarwal’s journey is marked by a deep understanding of the challenges faced by India’s bottom-of-the-pyramid segment and a commitment to provide them with seamless banking solutions.

The genesis of this transformative idea can be traced back to Agarwal’s field trips to remote parts of Uttar Pradesh in 2016-17. Armed with a law degree, he identified the pressing concerns faced by the unbanked population and envisioned a revolutionary approach to address their financial needs.

“The potential to offer small-ticket-sized loans—ranging from ₹25,000 to ₹30,000—to the unbanked in India is huge,” affirms Agarwal, emphasizing the vast market size estimated at ₹8 lakh crore, based on India’s unbanked population of 365 million.

To translate this vision into reality, Agarwal mobilized a team of engineers in 2017 to develop a digital application that leverages biometric-based e-KYC for customer verification. Over the subsequent three years, this technological leap transformed SE Investments, a brick-and-mortar financial lender founded by Agarwal’s father Sunil Agarwal in 1992, into a dynamic non-banking financial company (NBFC).

Paisalo Digital, under Agarwal’s strategic leadership, adopted a priority sector co-lending model with public banks to cater specifically to the unbanked and bottom-of-the-pyramid segment. The Paisalo app, which initially disbursed around 100 loans a day, has witnessed exponential growth, with approximately five times more disbursals and an estimated loan value of ₹5.5-6 crore per month.

Remarkably, these loans are extended at an exceptionally low-interest rate of 12.4 percent, emphasizing Agarwal’s commitment to ensuring financial accessibility for all. The first half of FY21 saw Paisalo reporting an impressive 81 percent rise in revenues and a 19 percent increase in assets under management compared to March-end 2020 levels.

Looking ahead, Agarwal envisions expanding co-lending partnerships with banks and is contemplating the prospect of applying for a small finance bank license within the next two years. Investors, recognizing Paisalo’s stable business model and the vast untapped potential in India’s fintech space, express confidence in Agarwal’s strategic approach.

“We like Paisalo’s stable business model. With fintech penetration very low, the runway ahead is huge. Paisalo rightly positions to ride on this scale,” remarks Saum Mehra, portfolio manager at Singapore’s Davos International Fund, reflecting the sentiments of investors who have been associated with Paisalo since 2010. In the hands of Santanu Agarwal, Paisalo Digital becomes not just a financial entity but a catalyst for transformative change, embodying the ethos of financial inclusion and innovation.